Budget game: Sandoval still in charge, despite court ruling

Democrats have been gloating over a state Supreme Court decision that might lead Republican Gov. Brian Sandoval to back off his “no new taxes” pledge. But while they may enjoy short-term political fodder over the issue, they haven’t “won” anything.

Back in 2010, lawmakers meeting in special session voted to take $62 million from the Clark County Clean Water Coalition to help close a state budget gap. The money was originally intended to fund a wastewater treatment project near Las Vegas and was raised through assessments on casinos and other entities.

Some of those forced to fund the coalition sued, arguing that they had been taxed for a specific purpose and if the money raised wasn’t going to be used for that purpose, it should be returned to those who contributed.

On Thursday, a unanimous state Supreme Court agreed.

The ruling is sound and has wide-ranging ramifications for the governor’s budget.

That’s because Gov. Sandoval’s spending plan – like the budgets of previous governors — included millions of dollars he sought to appropriate from Washoe and Clark counties and other government and quasi-government entities. The high court’s ruling leaves in doubt whether the state has the power to legally cannibalize those sources, which would leave a $600 million hole in the governor’s budget.

On Saturday, Democratic Attorney General Catherine Cortez Masto refused the governor’s request to seek a clarification from the justices over whether the ruling applied only to the Clean Water Coalition money or to all revenue he sought to take from local and county sources.

That means the state risks losing lawsuits if it moves forward with plans to grab local property tax money, for example, from Clark County.

As the matter played out Saturday, Gov. Sandoval said he might be willing to extend some of the various tax hikes passed in 2009 that were set to sunset on July 1 in order to cover the potential budget shortfall. In return, he hopes to force legislative Democrats to embrace more of his education reform package and other changes to public employee compensation. What would Democrats prefer? More cuts?

The reversal on his tax pledge will create political grief for Gov. Sandoval, but so far he’s taken the adult road. Democratic lawmakers eager to shout “hypocrisy” at the governor should take a deep breath. The court’s decision won’t generate any more money for them to spend. The governor – even if he agrees to lift some of the sunsets — will have held spending to a reasonable number, a number that for the first time in decades will be less than the state spent in the previous biennium.

In addition, the governor and legislative Republicans will have succeeded in blocking massive additional tax hikes proposed by Democrats, who sought, yet failed, to fund almost $1 billion in spending above what Gov. Sandoval thought appropriate during these difficult economic times.

In the end, legislative Democrats have no one but themselves to blame that they’ve spent the past couple months generating budget bills that call for spending $2 billion that the state won’t have. They’ve had four months — years, really — to publicly present a plan to shift available money to the areas they considered highest priority, while making equivalent reductions elsewhere. If they wanted to raise taxes, they’ve had two years to publish a plan and systematically make their case.

Instead, they tried their old game plan, putting on dog-and-pony shows while developing their plans in secret, assuming they could twist the arms of enough rural Republican to grease through their fiscal suicide pact at the last minute.

The game is over for the big spenders. There is no more money. The jig is up. At this point there’s no excuse for Democrats to dissemble and obfuscate. Get a deal. Pass a budget before this week’s deadline and go home.